Report Clears Meese of Wrongdoing in Iraqi Pipeline Deal with Israel

Independent counsel James McKay has cleared outgoing Attorney General Edwin Meese of any possible wrong-doing stemming from his association with purported plans to bribe the Israeli Labor Party not to destroy a proposed pipeline from Jordan to Iraq.

The findings were contained in a report, made public Monday, on McKay’s far-reaching inquiry into Meese’s activities as attorney general.

A key section of the report probes whether any of Meese’s activities in connection with the proposed pipeline were “rewarded by unlawful gratuities” from E. Robert Wallach, a longtime Jewish friend from San Francisco.

McKay found that the attorney general, upon learning from Wallach about “a promised covert payment to the Israeli Labor party, took no action to terminate United States government involvement in the Aqaba pipeline project or even to notify other United States government authorities of the possible existence of an illegal scheme.”

But the special prosecutor concluded that “there is no direct evidence,” apart from memoranda sent by Wallach, that “a bribe was or would be offered to any official of the Israeli Labor Party.”

McKay noted that a memo sent by Wallach to Meese suggested that Israel receive $65 million to $70 million a year for 10 years at the conclusion of the pipeline’s construction to guarantee security.

McKay quoted the Wallach memo, which was labeled “personal and confidential — for your eyes only,” as saying, “What was also indicated to me, and which would be denied everywhere, is that a portion of those funds will go directly to Labor.”

The pipeline scheme originated in 1983, when Bechtel Great Britain Ltd. proposed to Iraq and Jordan that a pipeline be constructed from Kirkuk, Iraq, to the Jordanian port of Aqaba.

Both welcomed the idea, although Iraq feared Israel might attack such a pipeline. Swiss-Jewish financier Bruce Rappaport later proposed to Bechtel that pipeline security could be guaranteed by his friend, Peres, who was then Israel’s prime minister.

After Rappaport could not receive a financial commitment from Israel, Rappaport sought U.S. support, and Wallach was recommended to him.